ASIC launches first 'best interests duty' case

ASIC has taken Melbourne-based NSG Services Pty Ltd to court for breaching the 'best interests duty' introduced as part of the FOFA reforms.

The court case marks the first civil penalty action ASIC has taken against a licensee for alleged breaches of the 'best interests duty' created under the Future of Financial Advice (FOFA) reforms.

ASIC alleges that NSG Services failed to take reasonable steps to ensure that its advisers complied with the best interests obligation when providing advice to clients.

The regulator also alleges that, on "numerous occasions", NSG advisers failed to act in the best interests of their clients.

ASIC also claims that NSG failed to provide appropriate training to its advisers, had innapropriate risk management and compliance policies, and sold clients insurance and/or superannuation accounts that "committed them to costly, unsuitable, and unnecessary financial arrangements".